3. Silver

The Introduction highlighted why differences can occur between LBMA and Metals Focus’ mine production and recycling data. For silver, the emphasis is a little different compared with gold. In particular, there is no ASM to speak of in the silver market. Instead, the differences largely reflect how the country-of-origin of silver recovered from base metals concentrates is determined. Ultimately, the metal is still captured in the CoO data, but quite often it is identified as recycling, rather than mine supply. This is why it often makes sense to look at combined CoO LSM and “Unprocessed” silver against the total for Metals Focus’ recycling and mine supply statistics. (This explains why the “Silver” portion of this CoO report features a combined “Mine Production/Recycling” section” below.)

Mine Production/Recycling

The observation about where spent EO catalysts are processed applies especially to the US. Looking first though at mine supply, the CoO figure of 584t falls well short of Metals Focus’ 1,028t for 2023. However, the consultancy’s combined primary silver and silver mined as a by-product of gold comes to 691t. Of note, this includes: Coeur Mining’s Rochester primary silver mine (106t), and the Andean Precious Metals Soledad Mountain by-product operation (24t; a Gauss/Thomas M Clay joint venture until mid-2024).

By contrast, the by-product base metals mining activity, which delivered 337t of silver in 2023, may partly be captured in the “Unprocessed” CoO total for the US of 112t. Equally, it may form part of the “Melted” category of 600t, given that some material may have been mis-classified as recycling, this being a frequent occurrence for the silver CoO data. Even if we take the “Melted” total at face value as being scrapped material, and bring this together with the 285t of “Industrial” CoO scrap, their combined total of 884t is still below Metals Focus’ US recycling of 1,486t. As touched on above, an important share of this consists of silver recovered from spent EO catalysts, which is processed by a non-GDL operation in the US.

Staying with the Americas, the Mexican LSM CoO total of 4,543t falls short of Metals Focus’ mine supply of 5,658t. The other CoO categories for Mexico are also relatively modest, the largest being 266t of “Mixed” recycling. As such, it appears that an important share of Mexican silver mine supply is initially treated by non-GDLs operations, or not classified as being of Mexican origin.

A closer look at the Metals Focus data seems to bear this out. Combined primary silver and by-product gold mining stood at 4,940t in 2023, so roughly 500t higher than the CoO LSM figure above. This consists of several large operations: Newmont’s Peñasquito polymetallic mine (604t); the Fresnillo/Pan American Silver joint venture Juanicipio primary silver mine (523t; previously a Fresnillo/MAG joint venture in the context of this 2023 analysis); Fresnillo’s San Julián primary silver operation (415t) and also their Fresnillo mine (405t). In total, Metals Focus tracked 48 primary and by-product operating mines in Mexico in 2023. 717t of Mexican silver mine supply was also derived from base metals production. It is this material which may instead be captured in the Japanese or Chinese silver CoO recycling data, if some of the concentrate was processed there.

Source: Metals Focus, LBMA; *Includes Russia for Metals Focus

Before looking at East Asia, it is worth reviewing another major silver producer, Peru. The CoO LSM 2023 total of 1,797t is barely half of Metals Focus’ silver mine production total of 3,388t. Interestingly, the gap is much smaller than our estimate of base metals by-product supply, of 2,443t, with the consultancy’s primary silver/by-product gold totalling 945t in 2023. This suggests that an important share of the silver-bearing base metals concentrate was correctly identified as being Peruvian. For the record, of the 30 operating mines in the Metals Focus database, the most notable include: the Teck Resources, BHP, Glencore, and Mitsubishi Corporation joint venture Antamina copper mine (361t); the Volcan Yauli zinc operation (243t), and Chinalco’s Toromocho copper mine (222t).

Switching to East Asia, four countries dominate the CoO data: China, Japan, South Korea and Hong Kong. The Chinese CoO LSM total of 3,060t is relatively close to Metals Focus’ 3,471t, suggesting that around 12% is treated by non-GDL refineries in the country. (As a reminder, there are 27 silver GDL and 40-50 non-GDL silver refineries in China.) The other noteworthy point in the Chinese CoO series is the sizeable 1,552t of “Unprocessed” and 1,742t of “Industrial” material recorded in the 2023 CoO dataset. These far exceed Metals Focus’ Chinese silver recycling total of 1,162t. This is because China imports a large volume of silverbearing base metals concentrates, and as explained earlier it is quite common for a GDL entity, in this case ones in China, to classify much of this material as both being recycled and of Chinese origin.

A similar dynamic plays out in Japan, which in fact has almost no silver mine production of its own. Instead, the sizeable 1,150t of “Unprocessed” and 1,081t of “Industrial” material denote silver recovered from imported base metals concentrates and industrial recycling, treated in part by the country’s 13 silver GDL entities. With regards to South Korea, despite having just two silver GDLs operations, the country’s CoO footprint, captured mostly in its 1,988t of “Industrial” recycling, runs quite close to the above Japanese figures. In both cases though, Metals Focus’ silver recycling totals are some way behind those highlighted in the CoO report.

Finally, turning to Europe, several CoO data points are worth highlighting. For the UK, the slight 61t of “Legacy” silver is interesting, suggesting that much of the pre-2012 has already been processed. By contrast, 302t of “Unprocessed” silver might largely relate to GDL bars from 2012 or later. A similar figure is reported as being of “Unprocessed” Swiss origin, totalling 258t, which may have been divested by Swiss investors. For both countries, Metals Focus estimated trivial levels of silver recycling in 2023. With regards to Germany, the 187t of CoO LSM is surprising, given the absence of domestic silver mining. In terms of recycling, the three categories apparently of German origin are worth highlighting: 752t of “Unprocessed”, 528t of “Melted” and 134t of “Industrial”. However, an important share of this consists of imported material, be that silverbearing mining concentrates or industrial scrap. By way of comparison, Metals Focus’ German silver scrap supply stood at an estimated 321t in 2023; as a reminder, Germany is home to five silver GDL operations.